Finsamudra Desk
A hedging cost subsidy from the RBI let State Bank of India offer up to 7.5% dollar deposit rates backed by 9x leverage, drawing $1.5 billion in global capital.
State Bank of India has attracted $1.5 billion from the global market through FCNR (Foreign Currency Non-Resident) deposits, according to a LinkedIn analysis of the mechanics behind the inflow.
The trigger was an RBI policy introduced last month that subsidised hedging costs for banks collecting fresh FCNR deposits. SBI used this regulatory opening to design a leveraged deposit programme.
The bank offered non-resident depositors interest rates of up to 7.5% on US dollars, paired with 9x leverage. A depositor could put down a fraction of their own funds, borrow the rest at low global rates, and deposit the full sum at 7.5%, capturing the interest rate spread as low-risk profit.
By subsidising the hedge, the RBI enabled SBI to pull in global capital at scale, adding to India's forex reserves without putting pressure on domestic rupee liquidity.
For lenders and treasury teams, this is a live example of how a targeted regulatory subsidy (hedge cost support) can be converted into a large-scale deposit-gathering lever. It shows the direct link between RBI policy design and a bank's ability to mobilise offshore capital cheaply.
For DSAs and connectors working NRI or forex-linked products, the SBI structure signals that leveraged, rate-arbitrage deposit schemes are back in favour when policy support exists — a pattern worth tracking if similar hedge subsidies extend to other deposit categories or lenders.
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Sources
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